Genting Singapore | ADD Target price: S$1.35 Aug 3 close: S$1.195 CIMB Research, Aug 3

As we have been too conservative in our VIP win rate assumptions for FY17-19 forecasts, we now increase our forecasts to 2.9 per cent versus 2.75 per cent previously. We have also toned down our operational cost estimates as we were previously too aggressive in forecasting other costs. Our changes result in FY17/18/19 forecast earnings before interest, tax, depreciation and amortisation (EBITDA) increasing 11 per cent/9.9 per cent/9.7 per cent, lifting our earnings per share by 18 per cent/15.9 per cent/15.6 per cent.

We maintain our "add" rating. The upgrade to our adjusted EBITDA forecasts lifts our target price to S$1.35, still based on an unchanged FY18 forecast enterprise value to EBITDA of 12 times (slightly above its six-year mean of 11.3 per cent). Potential re-rating catalysts are higher-than-expected margins and better gaming revenues. Downside risks are a fall in gaming revenues, higher trade receivable provisions and failure to secure opportunities in Japan.